The No-Brainer Portfolio by William Bernstein is a simple and straightforward approach to asset, region, and factor diversification that accomplishes all three in just four assets.
Asset Allocation
Change the home country to translate the portfolio to local asset options.
| % | Asset Class |
|---|---|
| 25% | United States Large Cap Blend Stocks |
| 25% | United States Small Cap Blend Stocks |
| 25% | Developed ex-US Small Cap Blend Stocks |
| 25% | United States Short Term Treasury Bonds |
Other Versions
While they’re not all direct iterations of the No-Brainer Portfolio, Bernstein talks about all types of asset allocations in his writings. Here are just a few examples, and you can also model any version you like using the Charts.
Four Pillars Medium — Expanding the No-Brainer into value factors and real estate
Coward’s Portfolio — A modest proposal for a naive allocation that beats the experts
Sheltered Sam 60-40 — A unique portfolio designed for a specific investing persona
Author
William Bernstein
William Bernstein is a neurologist and financial author who writes prolifically on asset allocation. You can read his thoughts on the No-Brainer Portfolio in his book The Intelligent Asset Allocator.
Overview
The No-Brainer Portfolio, also sometimes called the Simpleton’s Portfolio, is an interesting study in asset allocation. Bernstein is a self-described “asset junkie” who enjoys discussing all types of increasingly sophisticated portfolios custom designed for unique investor needs and fine-tuned with advanced concepts like efficient frontiers. While the No-Brainer Portfolio is just the simplest introductory idea in The Intelligent Asset Allocator, I also think it uniquely expresses some of his most fundamental insights.
Bernstein tends to talk about his ideas self-deprecatingly in terms of naive but effective diversification, but the thing I find most interesting is how the No-Brainer Portfolio tackles three different types of diversification in the most efficient way possible. By adding small cap stocks, international stocks, and short term bonds to a traditional large cap stock fund, it demonstrates how easy it is to construct a well-considered asset allocation that doesn’t depend so much on the handful of large cap companies that tend to dominate stock returns. For a lot of people looking for maximum diversification with minimum effort, that really is a no-brainer.
Performance
Calculations use localized assets and data for the selected home country.
Comparisons
Calculations use localized assets and data for the selected home country.
Learn more about the metrics on the Portfolio Matrix page.
Alternatives
Portfolios with a similar structure or design intent
Permanent Portfolio — Another 4-asset approach that focuses on diversification
Ideal Index Portfolio — Similar portfolio structure showcasing value and growth tilts
Core Four Portfolio — Similar percentage of stocks with REITs instead of small caps
Articles
Insights that mention the No-Brainer Portfolio
Discussion
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